Toys 'R' Us is said to miss vendor payments as woes mount

Toys "R" Us has missed payments to some suppliers in recent days as its U.S. division heads toward a likely liquidation, according to people with knowledge of the situation.

The payments stopped without explanation, said the people, who asked not to be identified because the matter is private. Some of the people said they can't get anyone to respond to questions at the retailer, which filed for bankruptcy in September and faces a $5 billion debt load.

Toys "R" Us also recently stopped negotiating settlements with vendors on money owned before it filed for bankruptcy, some of the people said. A representative for Wayne, New Jersey-based Toys "R" Us declined to comment.

The bleak situation lends evidence to the notion that Toys "R" Us is moving toward winding down its U.S. operations for good. Bloomberg reported last week that the retailer was making preparations for a liquidation of its domestic business.

The company has failed to find a buyer or reach a debt restructuring deal with lenders, leaving it with few options, people familiar with the situation said at the time. A hearing in bankruptcy court is scheduled to be held on Thursday, after being delayed.

The struggles of Toys "R" Us have taken a toll on the two largest U.S. toymakers, Hasbro and Mattel. Shares of those companies fell on Friday after Bloomberg reported about the possible liquidation, then dipped again on Tuesday.